All amounts in this news release are presented in |
The Company reported first quarter 2024 cash flow from operating activities and adjusted funds flow of
FIRST QUARTER HIGHLIGHTS
- Adjusted funds flow(1) was
$173.1 million (inclusive of$7.8 million of transaction costs associated with the pending combination with Chord) - Capital spending was
$126.7 million - Generated free cash flow(1) of
$46.4 million - First quarter total production was 87,151 BOE per day, including liquids production of 56,513 barrels per day
- Strong operational momentum expected to drive approximately 15% sequential liquids production growth in the second quarter of 2024
(1) This is a non-GAAP financial measure. Refer to "Non-GAAP and Other Financial Measures" section for more information. |
"Our positive operating performance is continuing in 2024," said
FIRST QUARTER SUMMARY
Production in the first quarter of 2024 was 87,151 BOE per day, a decrease of 11% compared to the same period in 2023, and 16% lower than the prior quarter. Crude oil and natural gas liquids production in the first quarter of 2024 was 56,513 barrels per day, in line with the same period a year ago, and 16% lower than the prior quarter. The lower production compared to the prior quarter was driven by the planned sequencing of
The Company's realized Marcellus natural gas price differential was
Operating expenses were
Cash general and administrative expenses for the first quarter of 2024 were
Current tax expense was
Capital spending totaled
(1) This is a non-GAAP financial measure. Refer to "Non-GAAP and Other Financial Measures" section for more information. |
OPERATIONS
Operational execution remains solid with improving drilling and completion cycle times, including a significant increase in completion stages per day driven by simul-frac operations, total well costs tracking 5% lower year-over-year, and strong well productivity. In the second quarter,
Marcellus production averaged 116.5 MMcf per day during the first quarter of 2024, approximately 18% lower than the prior quarter and 35% lower than the same period in 2023 due to limited capital investment and price related production curtailments.
RETURN OF CAPITAL TO SHAREHOLDERS
2024 GUIDANCE
There are no changes to
PRICE RISK MANAGEMENT
The following is a summary of
WTI Crude Oil ($/bbl)(1) | |
April 1, 2024 – | |
3 Way Collars | |
Volume (bbls/day) | 5,000 |
Sold Puts | |
Purchased Puts | |
Sold Calls |
(1) | The total average deferred premium spent on outstanding crude oil contracts is |
FIRST QUARTER 2024 PRODUCTION AND OPERATIONAL SUMMARY TABLES
Summary of Average Daily Production(1)
Three months ended | ||||
Marcellus | Other(2) | Total | ||
Tight oil (bbl/d) | 45,238 | - | 1,028 | 46,266 |
Total crude oil (bbl/d) | 45,238 | - | 1,028 | 46,266 |
Natural gas liquids (bbl/d) | 10,120 | - | 127 | 10,247 |
Shale gas (Mcf/d) | 66,207 | 116,521 | 1,098 | 183,826 |
Total natural gas (Mcf/d) | 66,207 | 116,521 | 1,098 | 183,826 |
Total production (BOE/d) | 66,393 | 19,420 | 1,338 | 87,151 |
(1) | Table may not add due to rounding. |
(2) |
Summary of Wells Drilled(1)
Three months ended | |||||
Operated | Non-Operated | ||||
Gross | Net | Gross | Net | ||
21 | 16.0 | 21 | 2.9 | ||
Marcellus | - | - | 22 | 0.9 | |
- | - | - | - | ||
Total | 21 | 16.0 | 43 | 3.8 |
(1) | Table may not add due to rounding. |
Summary of Wells Brought On-Stream(1)
Three months ended | |||||
Operated | Non-Operated | ||||
Gross | Net | Gross | Net | ||
12 | 9.7 | 1 | 0.3 | ||
Marcellus | - | - | 6 | 0.1 | |
- | - | - | - | ||
Total | 12 | 9.7 | 7 | 0.3 |
(1) | Table may not add due to rounding. |
Three months ended | ||||||
SELECTED FINANCIAL RESULTS | ||||||
2024 | 2023 | |||||
Financial (US$, thousands, except ratios) | ||||||
Net Income/(Loss) | $ | 66,136 | $ | 137,486 | ||
Adjusted Net Income(1) | 73,091 | 140,729 | ||||
Cash Flow from Operating Activities | 128,657 | 241,401 | ||||
Adjusted Funds Flow(1) | 173,066 | 260,409 | ||||
Dividends to Shareholders - Declared | 13,276 | 11,993 | ||||
Net Debt(1) | 140,692 | 150,622 | ||||
Capital Spending | 126,702 | 138,648 | ||||
Property and Land Acquisitions | 1,464 | 1,748 | ||||
Property and Land Divestments | (100) | 233 | ||||
Net Debt to Adjusted Funds Flow Ratio(1) | 0.2x | 0.1x | ||||
Financial per Weighted Average Shares Outstanding | ||||||
Net Income/(Loss) - Basic | $ | 0.32 | $ | 0.63 | ||
Net Income/(Loss) - Diluted | 0.32 | 0.62 | ||||
Weighted Average Number of Shares Outstanding (000's) - Basic | 203,558 | 216,806 | ||||
Weighted Average Number of Shares Outstanding (000's) - Diluted | 205,852 | 222,927 | ||||
Selected Financial Results per BOE(2)(3) | ||||||
Crude Oil & Natural Gas Sales(4) | $ | 45.65 | $ | 47.02 | ||
Commodity Derivative Instruments | 0.09 | 3.90 | ||||
Operating Expenses | (12.86) | (10.56) | ||||
Transportation Costs | (4.09) | (4.30) | ||||
Production Taxes | (3.71) | (3.43) | ||||
General and Administrative Expenses | (1.20) | (1.48) | ||||
Cash Share-Based Compensation Recovery/(Expense) | (0.43) | 0.10 | ||||
Interest, Foreign Exchange and Other Expenses | (1.32) | (0.37) | ||||
Current Income Tax Recovery/(Expense) | (0.31) | (1.25) | ||||
Adjusted Funds Flow(1) | $ | 21.82 | $ | 29.63 |
Three months ended | ||||||
SELECTED OPERATING RESULTS | ||||||
2024 | 2023 | |||||
Average Daily Production(3) | ||||||
Crude Oil (bbls/day) | 46,266 | 47,369 | ||||
Natural Gas Liquids (bbls/day) | 10,247 | 9,365 | ||||
Natural Gas (Mcf/day) | 183,826 | 245,509 | ||||
Total (BOE/day) | 87,151 | 97,652 | ||||
% Crude Oil and Natural Gas Liquids | 65 % | 58 % | ||||
Average Selling Price(3)(4) | ||||||
Crude Oil (per bbl) | $ | 74.54 | $ | 76.34 | ||
Natural Gas Liquids (per bbl) | 18.21 | 20.55 | ||||
Natural Gas (per Mcf) | 1.86 | 3.18 | ||||
Net Wells Drilled | 19.8 | 15.7 |
(1) | This financial measure is a non‑GAAP financial measure. See "Non-GAAP and Other Financial Measures" section in this news release. |
(2) | Non‑cash amounts have been excluded. |
(3) | Represents net production volumes. See "Basis of Presentation" section in this news release. |
(4) | Before transportation costs and commodity derivative instruments. |
Condensed Consolidated Balance Sheets
(US$ thousands) unaudited | ||||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 33,412 | $ | 66,731 | ||
Accounts receivable, net of allowance for doubtful accounts | 252,571 | 268,433 | ||||
Other current assets | 28,748 | 48,120 | ||||
314,731 | 383,284 | |||||
Property, plant and equipment: | ||||||
Crude oil and natural gas properties (full cost method) | 1,551,081 | 1,511,682 | ||||
Other capital assets | 10,994 | 9,546 | ||||
Property, plant and equipment | 1,562,075 | 1,521,228 | ||||
Other long-term assets | 6,141 | 5,945 | ||||
Right-of-use assets | 23,851 | 24,996 | ||||
Deferred income tax asset | 131,527 | 133,023 | ||||
Total Assets | $ | 2,038,325 | $ | 2,068,476 | ||
Liabilities | ||||||
Current liabilities | ||||||
Accounts payable and other current liabilities | $ | 357,541 | $ | 385,670 | ||
Current portion of long-term debt | 80,600 | 80,600 | ||||
Current portion of lease liabilities | 11,460 | 12,087 | ||||
449,601 | 478,357 | |||||
Long-term debt | 93,504 | 105,429 | ||||
Asset retirement obligation | 117,631 | 125,452 | ||||
Lease liabilities | 13,067 | 14,333 | ||||
Deferred income tax liability | 118,648 | 117,556 | ||||
Total Liabilities | 792,451 | 841,127 | ||||
Shareholders' Equity | ||||||
Share capital – authorized unlimited common shares, no par value Issued and outstanding: | 2,694,403 | 2,692,053 | ||||
Paid-in capital | 13,531 | 44,499 | ||||
Accumulated deficit | (1,160,719) | (1,207,862) | ||||
Accumulated other comprehensive loss | (301,341) | (301,341) | ||||
1,245,874 | 1,227,349 | |||||
Total Liabilities & Shareholders' Equity | $ | 2,038,325 | $ | 2,068,476 |
Condensed Consolidated Statements of Income/(Loss) and Comprehensive Income/(Loss)
Three months ended | ||||||
(US$ thousands, except per share amounts) unaudited | 2024 | 2023 | ||||
Revenues | ||||||
Crude oil and natural gas sales | $ | 362,037 | $ | 413,182 | ||
Commodity derivative instruments gain/(loss) | (2,775) | 27,965 | ||||
359,262 | 441,147 | |||||
Expenses | ||||||
Operating | 102,001 | 92,804 | ||||
Transportation | 32,464 | 37,768 | ||||
Production taxes | 29,436 | 30,123 | ||||
General and administrative | 24,257 | 19,432 | ||||
Depletion, depreciation and accretion | 92,510 | 87,109 | ||||
Interest | 3,530 | 4,318 | ||||
Other expense/(income) | (3,873) | (2,763) | ||||
Transaction costs | 7,769 | — | ||||
288,094 | 268,791 | |||||
Income/(Loss) Before Taxes | 71,168 | 172,356 | ||||
Current income tax expense/(recovery) | 2,445 | 11,000 | ||||
Deferred income tax expense/(recovery) | 2,587 | 23,870 | ||||
Net Income/(Loss) and Comprehensive Income/(Loss) | $ | 66,136 | $ | 137,486 | ||
Net Income/(Loss) per Share | ||||||
Basic | $ | 0.32 | $ | 0.63 | ||
Diluted | $ | 0.32 | $ | 0.62 |
Condensed Consolidated Statements of Cash Flows
Three months ended | ||||||
(US$ thousands) unaudited | 2024 | 2023 | ||||
Operating Activities | ||||||
Net income/(loss) | $ | 66,136 | $ | 137,486 | ||
Non-cash items add/(deduct): | ||||||
Depletion, depreciation and accretion | 92,510 | 87,109 | ||||
Unrealized (gain)/loss on derivative instruments | 3,529 | 6,344 | ||||
Deferred income tax expense/(recovery) | 2,587 | 23,870 | ||||
Share-based compensation and general and administrative | 11,351 | 7,363 | ||||
Other expense/(income) | (3,189) | (1,835) | ||||
Amortization of debt issuance costs | 343 | 394 | ||||
Investing activities in Other expense/(income) | (201) | (322) | ||||
Asset retirement obligation settlements | (10,941) | (6,782) | ||||
Changes in non-cash operating working capital | (33,468) | (12,226) | ||||
Cash flow from/(used in) operating activities | 128,657 | 241,401 | ||||
Financing Activities | ||||||
Drawings from/(repayment of) bank credit facilities | (12,267) | (56,316) | ||||
Purchase of common shares under Normal Course Issuer Bid | (16,201) | (54,560) | ||||
Share-based compensation – tax withholdings settled in cash | (29,566) | (16,392) | ||||
Dividends | (13,276) | (11,993) | ||||
Cash flow from/(used in) financing activities | (71,310) | (139,261) | ||||
Investing Activities | ||||||
Capital and office expenditures | (104,829) | (93,923) | ||||
Canadian divestments | 13,335 | 5,191 | ||||
Property and land acquisitions | (1,464) | (1,748) | ||||
Property and land divestments | 2,400 | 2,733 | ||||
Cash flow from/(used in) investing activities | (90,558) | (87,747) | ||||
Effect of exchange rate changes on cash and cash equivalents | (108) | 185 | ||||
Change in cash and cash equivalents | (33,319) | 14,578 | ||||
Cash and cash equivalents, beginning of period | 66,731 | 38,000 | ||||
Cash and cash equivalents, end of period | $ | 33,412 | $ | 52,578 |
NOTICE REGARDING INFORMATION CONTAINED IN THIS NEWS RELEASE
Readers are urged to review the 2024 interim Management's Discussion & Analysis (MD&A) and financial statements, and 2023 MD&A and financial statements filed on SEDAR+ and as part of our Form 6-K and Form 40-F, respectively, on EDGAR concurrently with this news release for more complete disclosure on our operations.
Advisory Regarding 2024 Guidance
This news release includes certain corporate guidance of
Currency and Accounting Principles
All amounts in this news release are stated in
Barrels of Oil Equivalent
This news release contains references to "BOE" (barrels of oil equivalent), "MBOE" (one thousand barrels of oil equivalent), and "MMBOE" (one million barrels of oil equivalent).
Basis of Presentation
All production volumes presented in this news release are reported on a "net" basis (the Company's working interest share after deduction of royalty obligations, plus the Company's royalty interests), unless expressly indicated that it is being presented on a "gross" basis.
All references to "liquids" in this news release include light and medium crude oil, heavy oil and tight oil (all together referred to as "crude oil") and NGLs on a combined basis. All references to "natural gas" in this news release include conventional natural gas and shale gas on a combined basis.
FORWARD-LOOKING INFORMATION AND STATEMENTS
This news release contains certain forward-looking information and statements ("forward-looking information") within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "guidance", "ongoing", "may", "will", "project", "plans", "budget", "strategy" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the foregoing, this news release contains forward-looking information pertaining to the following: 2024 production and capital spending guidance; expectations regarding liquids production growth in the second quarter of 2024; expectations regarding the number of gross and net operated wells brought on production in the second quarter of 2024; and the closing of the Arrangement and the anticipated timing and benefits thereof to shareholders.
The forward-looking information contained in this news release reflects several material factors and expectations and assumptions of
In addition, our production and capital expenditures 2024 guidance described in this news release is based on rest of year commodity prices of: a WTI price of
The forward-looking information included in this news release is not a guarantee of future performance and should not be unduly relied upon. Such information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information including, without limitation: continued instability, or further deterioration, in global economic and market environment, including from inflation and/or the conflicts in
The forward-looking information contained in this news release speaks only as of the date of this news release.
NON-GAAP AND OTHER FINANCIAL MEASURES
Readers are referred to "Non-GAAP and Other Financial Measures" in
Non-GAAP Financial Measures
This news release includes references to certain non-GAAP financial measures and non-GAAP ratios used by the Company to evaluate its financial performance, financial position or cash flow. Non-GAAP financial measures are financial measures disclosed by a company that (a) depict historical or expected future financial performance, financial position or cash flow of a company, (b) with respect to their composition, exclude amounts that are included in, or include amounts that are excluded from, the composition of the most directly comparable financial measure disclosed in the primary financial statements of the company, (c) are not disclosed in the financial statements of the company and (d) are not a ratio, fraction, percentage or similar representation. Non-GAAP ratios are financial measures disclosed by a company that are in the form of a ratio, fraction, percentage or similar representation that has a non-GAAP financial measure as one or more of its components, and that are not disclosed in the financial statements of the company.
These non-GAAP financial measures and non-GAAP ratios do not have standardized meanings or definitions as prescribed by U.S. GAAP and may not be comparable with the calculation of similar financial measures by other entities.
For each measure, we have: (a) indicated the composition of the measure; (b) identified the most directly comparable GAAP financial measure and provided comparative detail where appropriate; (c) indicated the reconciliation of the measure to the most directly comparable GAAP financial measure to the extent one exists; and (d) provided details on the usefulness of the measure for the reader. These non-GAAP financial measures and non-GAAP ratios should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
"Adjusted funds flow" is used by
Three months ended | ||||||
($ millions) | 2024 | 2023 | ||||
Cash flow from/(used in) operating activities | $ | 128.7 | $ | 241.4 | ||
Asset retirement obligation settlements | 10.9 | 6.8 | ||||
Changes in non-cash operating working capital | 33.5 | 12.2 | ||||
Adjusted funds flow | $ | 173.1 | $ | 260.4 |
"Adjusted net income/(loss)" is used by
Three months ended | ||||||||||||
($ millions) | 2024 | 2023 | ||||||||||
Net income/(loss) | $ | 66.1 | $ | 137.5 | ||||||||
Unrealized derivative instrument, foreign exchange and marketable securities (gain)/loss | 1.8 | 4.6 | ||||||||||
Transaction costs | 7.8 | — | ||||||||||
Tax effect | (2.6) | (1.4) | ||||||||||
Adjusted net income/(loss) | $ | 73.1 | $ | 140.7 | ||||||||
"Free cash flow" is used by
Three months ended | ||||||
($ millions) | 2024 | 2023 | ||||
Adjusted funds flow(1) | $ | 173.1 | $ | 260.4 | ||
Capital spending | (126.7) | (138.6) | ||||
Free cash flow | $ | 46.4 | $ | 121.8 |
1) | See adjusted funds flow reconciliation above for a breakdown of the adjustments made to cash flow from/(used in) operating activities. |
"Net debt" is used by
($ millions) | ||||||
Current portion of long-term debt | $ | 80.6 | $ | 80.6 | ||
Long-term debt | 93.5 | 105.4 | ||||
Less: Cash and cash equivalents | (33.4) | (66.7) | ||||
Net debt | $ | 140.7 | $ | 119.3 |
"Net debt to adjusted funds flow ratio" is used by
($ millions) | ||||||
Net debt(1) | $ | 140.7 | $ | 119.3 | ||
Trailing adjusted funds flow | 873.9 | 961.2 | ||||
Net debt to adjusted funds flow ratio | 0.2x | 0.1x |
(1) | See net debt reconciliation above. |
Other Financial Measures
SUPPLEMENTARY FINANCIAL MEASURES
Supplementary financial measures are financial measures disclosed by a company that (a) are, or are intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of a company, (b) are not disclosed in the financial statements of the company, (c) are not non-GAAP financial measures, and (d) are not non-GAAP ratios. The following section provides an explanation of the composition of those supplementary financial measures if not previously provided:
"Capital spending" Capital and office expenditures, excluding other capital assets/office capital, property and land acquisitions and divestments, and non-cash investing working capital.
"Cash general and administrative expenses" or "Cash G&A expenses" General and administrative expenses that are settled through cash payout, as opposed to expenses that relate to accretion or other non-cash allocations that are recorded as part of general and administrative expenses.
Electronic copies of
SOURCE
© Canada Newswire, source